Hon Hai chief promises 10% growth

TAIPEI--The chairman of Taiwan-based Hon Hai (鴻海) Precision Industry Co., a major supplier of Apple Inc., promised Wednesday that his company's revenue and profits will grow 10 percent this year.

Speaking at the company's annual shareholders' meeting, Terry Gou (郭台銘) said Hon Hai, also known as Foxconn Technology Group (富士康集團), will seek to increase its profits in 2014 instead of focusing only on revenue growth.

Gou said he was “confident” that Hon Hai would post at least 10-percent growth in both sales and profits through efforts to cut costs and expand the company's use of automation.

Hon Hai also intends to build up its cash reserves to support long-term investment in such fields as cloud computing technologies that have longer payback periods than the manufacturing of consumer electronics gadgets, Gou said.

The investment plan reflects the company's determination to go beyond its status as the world's biggest contract electronics manufacturer and move into new generation businesses.

In its annual report to shareholders, Hon Hai said it is evolving from its existing “Integration-Innovation-Design-Manufacturing” base into cloud services, wireless 4G-LTE networking services and the e-commerce sector.

In the future fifth-generation (5G) era, the company will focus on the development of automation and artificial intelligence, as well as combining hardware and software capabilities to improve human life, the annual report said.

'Comprehensive' Growth in Company

Gou expressed optimism Wednesday that the company's ongoing transformation plan will generate business growth in the coming years.

Gou said that Hon Hai has spent the past two years reinventing itself from a contract electronics manufacturer into a technology services provider.

Hon Hai will make further adjustments to its corporate structure, technologies and business model from 2015 to 2017, Gou said, which he expected to result in “comprehensive and structural growth” from multiple customers.

During the company's transformation process, however, Hon Hai will also continue to invest in research and development, employee training and new customer development in order to sustain its growth.

He said the company has teamed up with Japanese mobile company SoftBank Corp. to manufacture a new humanoid robot called “Pepper,” which could function in multiple roles, from babysitters to store clerks.

The Pepper will be equipped with a cloud computing platform that can handle massive amounts of data and be furnished with various applications, making the robot more intelligent and capable of self-learning, Gou said.

These initiatives are part of Hon Hai's strategy to transform itself into a technology services company to meet consumer demand, a strategy outlined by Gou on June 10 at the Global Device Summit in Shanghai.

Hon Hai Chairman Terry Gou (郭台銘) speaks at the company's shareholder meeting in Taipei, yesterday. Gou discussed the issue of horizontal competition as well as future plans for Hon Hai. The meeting lasted for seven hours, with Gou promising that his company's revenue and profits will grow 10 percent this year. (CNA)